Consolidated Water Co. Ltd. (CWCO) yesterday credited its Bahamas and Cayman operations with revenue and gross profit growth in its U.S. Securities and Exchange Commission (SEC) filings, posting a $1.7 million gain in revenue from this territory.
The SEC filing showed that the company posted a total revenue increase of 11 percent to $65.7 million, which drove gross profit up 11 percent to $26.7 million. Revenue for 2017 was $59.4 million, while profit was at $24 million.
The company’s President and CEO Rick McTaggart, in a press release on the company’s performance called 2018 a “great year” for CWCO.
“We realized revenue and gross profit growth in each segment of our business, especially in our Cayman and Bahamian operations, which improved our profitability,” said McTaggart.
“Our momentum continued into the new year, as we obtained a new combined water supply agreement from the Water Authority – Cayman for the operation of the North Sound and Red Gate plants in the Cayman Islands.
“In February, we completed the expansion of the water production and storage capacity of the Abel Castillo Water Works plant in Grand Cayman. We made further headway with the Rosarito project, securing bank approval for more than $200 million of the required financing. We also recently completed the sale of our Belize operations for $7 million, and we were able to repatriate more than $12 million in total in cash from Belize. We plan to use these funds to support our growth initiatives.”
The SEC filing also noted that CWCO completed the capital improvements to New Providence’s Windsor plant, which is “designed to meet performance guarantees through August 2033”.
The filing also explains that the company’s cash and cash equivalents decreased year-on-year from $45.5 million in December 2017 to $31.3 million in December 2018, as a “result of increases in accounts receivable as well as capital expenditures related to the refurbishment of the Windsor plant in the Bahamas and, to a lesser extent, retail operations in Grand Cayman”.
McTaggart told the Water and Sewerage Corporation (WSC) in a letter penned last July that given a $16.1 million debt, his company now considered calling out the bad debt and warning on delinquency of payment, which it did in its last SEC recent filing. He also said in the letter that such a filing could hurt the reputation of both the WSC and the government of The Bahamas.
The letter read: “Thus far in 2018, CWCO has not highlighted the high receivable from WSC in its public filings since it has always considered such receivable to be fully collectible. As such, CWCO has not been required to make any ‘bad debt’ provision against any portion of the overdue amount. However, the extraordinarily high receivables and resulting prospective operational difficulties have caused CWCO, in consultation with the company, to undertake an updated assessment of the credit risk. In the event the company and CWCO conclude that such provision must be made, not only will this negatively impact their financial circumstances, but it is possible that it will negatively impact the reputation of WSC and that of the government of The Bahamas as well. In this regard, you should further be aware that CWCO’s next quarterly filing of a form 10-Q is due on August 8, 2018, with an analyst/investor call to follow on the morning of August 9, 2018.”
WSC Executive Chairman Adrian Gibson explained in November that as of that month CW had received more than $15 million from WSC and that between September and October about $5 million was paid out to CW.
Gibson stressed that the WSC and the Ministry of Finance had also entered into a payment plan with CW.
“We believe that we have acted in good faith and a payment arrangement was made,” he said. “The idea is to stay current and draw down on the arrears.”
Education: Florida International University, BS in Journalism